Japan’s Bad Bets on Tech and the Enormous Consequences

Japan chose relationships over information. When Japan’s consumer electronics business was confronted with the combination of the internet and the iPhone, Japan buckled. The leaders in Japan saw that essentially the entire electronics district of Akihabara was being sucked into a single device, the iPhone (and not Docomo’s then dominant clamshells) they retrenched.

I believe they couldn’t really grasp the iPhone. It was too ominous for Japan’s industrial might. Japan had built a large part of it’s consumer business on gadgets that made life easier and more fun. People flocked to Akihabara to see the latest device.

In the 80’s and 90’s the world collectively marveled at how far ahead Japan was. Endless blogs, documentaries described how Japan was a nation of the future. Even as that lead was not only eroding but collapsing.

How could this happen? What mistakes did Japan make? How could it have been different?

To answer that question, lets go back in time to the late 80’s and Japan’s great property and stock bubble. If you weren’t aware, in 1989, the Emperor’s Palace in downtown Tokyo was worth more than the entire state of California. Let that sink in. The Emperor house and grounds, which I often jogged around several times an evening, were worth more than Hollywood, Silicon Valley, San Fransisco, Los Angeles, Orange County and the entire state. (which is larger than Japan in size) A house was worth more than all that.

And NEC was the world’s largest silicon manufacturer making Japan ground zero for the worlds electronics industry. When Japan lost that lead, the inevitable demise of the entire consumer electronics industry began.

It wasn’t just NEC, it was the whole of Japan’s industrial might. Everything from Japan’s great automakers to electronics to silicon to mechanical robot manufacturers were leading the field and cashed up.

So Japan had the funds. And the lead. Side note, look at pictures of any major downtown business district with signage, like New York’s Times Square. Japanese giants neon signs dominated then. But look at them now? Not a one. What happened? How could this happen?

Japan’s Bad Bets
Hardware Over Software
The best analogy I can think of is robotics. In the 80’s Japan dominated industrial and consumer robotics. Everything from Sony’s Aibo robot dog to Asimo Honda’s robot man who could dance, climb stairs and entertain the crowd over at Honda’s main showroom. (still worth checking out if you get to Tokyo)

Japan chose mechanical robots and the world chose software. The problem was that mechanical robots are inherently more difficult to produce than digital ones. And that software and information combine to solve many problems that mechanical robots used to solve (3-d printing over factory production, for example)

Mechanical robots are entirely dependent on information to be relevant. AI + robots are the best example of future robotics that are rapidly transforming everything we know about modern life essentially.

It’s a bit of a simplification but helpful to think of robots as dumb and AI as smart. What happens when smart meets dumb? Dumb works for smart. Smart can hire or outsource dumb to do it’s dirty work. And that’s what happened.

AI got all the cash and it invested into robots. So we’re seeing some damn smart robot’s come out of the US. The best known example being Boston Dynamics dog: Which I believe Google recently sold not because it wasn’t a good investment but because it didn’t want to be known in popular opinion as The Evil Terminator. Essentially a PR move because Google is dominating in so many other fields they didn’t want a super smart robot that is rapidly becoming a US military tool on their books. So they washed their hands of it.

I, for one, wish they kept it. I think Google could have done cooler things with it. But, just like I didn’t like mothballing modern nuclear technology and the halting of new nuke plants, which I also think is awesome, public opinion wins out. As a side note, as pro-solar and electric as I am, and you’ll be hard pressed to find a bigger Elon Musk Tesla fan, I think modern nuke technology is fricking awesome and as true tragedy that it’s not being developed (due to Russian 1970-80’s incompetence) and Japan’s poor decision to continue operating an early 1970’s design in an area that had tsunami’s since the beginning of time.

And that it all could have been prevented if the Japanese government had simply accept the US’s Navy’s offer to supply electricity to the backup generators from an aircraft carrier, which it was designed and prepared to do. In my mind Japan’s nuclear meltdown is due to those three things.

Poor choice of locations (tsunami area) , poor decision not to upgrade faulty 1970’s GE technology (should have been upgraded or mothballed) and most importantly, the horrendous decision by the Japanese government’s decision to ‘handle it themselves” and turn away the offer of electricity from a US ship: which had plenty of time to get there, set up, get the giant cord over to the cooling system and connect it. But it was turned away. And no one is talking about it.

If a fire starts in my house. And my neighbor sees it and offers his fire extinguisher and I refuse. And subsequently my house goes down in flames, who is to blame? The fire? The stove? I had an easy way to handle the situation but was too proud to accept it. So who is to blame?

Anyway, I’ve gotten off topic, Japan’s essentially dumb robots are now a commodity. Companies with AI, big data, algorithms can easily get a robot to do the physical part. The value is in the software.

And Japan missed the software revolution. Completely. Oh and the internet. I know it’s hard to fathom but it’s true. Japan missed both. And continues to miss them.

Why could be due to heirarchical decision making in a time of rapid technological progress. It’s still common for Japan’s executives to not send their own email. The secretary does that. And she, yes it’s a she in Japan, prints them all out for him (yes it’s a him) and has them ready on his desk in the morning.

This state of corporate affairs is what guided the poor decision of the past and continues to this day. I am a huge Japan fan and hope that articles like this can pull Japan out of it’s doldrums before it’s too late. And the Japanese are all working for China. But I’m not hopeful.